Oppenheimer, a name synonymous with expert investment advice, recently gave its verdict in the ongoing Big Tech competition. It favors Alphabet (GOOG, GOOGL), the parent company of Google, over Meta Platforms (META), which owns social media giants Facebook and Instagram. In the current fiscal year, both these titans have out-performed not only the Roundhill Magnificent Seven ETF (MAGS) but also the S&P 500. However, when a direct comparison is drawn, Oppenheimer analysts veer towards Alphabet.
The reason is not just Alphabet's recent share price projection of $300, which is around 18% higher than the close on Friday and a new zenith on Wall Street, but also its relatively lower valuation. On the other hand, Meta's target stands at $825, which is only 15% higher than last week's finish and below the average projected by Visible Alpha analysts.
This preference for Alphabet stems from what Oppenheimer analysts view as "more conservative" Street estimates for Alphabet. In addition, while they appreciate Meta's foray into AI and its established prowess in outgrowing its peers, Alphabet's more prudent estimates and lower evaluation generate greater confidence.
The reference by Capital Group to the increasing breadth of the stock market denotes a sustainable shift from the extreme concentration that earlier precipitated concerns about risks to investors’ portfolios. Given the escalating evaluations of the firms in the index and improved clarity on tariffs and interest rate cuts, the U.S. equities market is likely to gain an uplift and stay ahead of its European counterparts and other global markets.